NITTO DENKO CORPORATION
6988・Prime Market・Chemicals
Business
Nitto Denko is a functional materials manufacturer founded in 1918, holding eight core technologies: adhesion, optical design, circuit formation, thin-film formation, porous materials, separation, nucleic acid synthesis, and drug delivery systems. Its business is organized into four segments: Industrial Tape (functional materials for smartphones, semiconductors, and automobiles), Optronics (optical films and circuit materials for HDDs), Human Life (nucleic acid contract manufacturing, polymer separation membranes, and hygiene materials), and Others (new businesses). Major customers span a wide range, including smartphone manufacturers, semiconductor manufacturers, data center operators, and pharmaceutical companies, and the group, including 87 subsidiaries, recorded revenue of ¥1,028,171 million in FY2026 (ending March 2026).
Business Model
The core is the "Niche Top strategy," which combines the company's own eight core technologies to aim for the No.1 share in niche fields that competitors find difficult to imitate. Through "Three-New activities" that create new applications, new products, and new demand, the company extends product life cycles while achieving stable earnings by continuously supplying materials and components deeply embedded in customers' manufacturing processes. In FY2026 (ending March 2026), the operating profit margin is 17.9%, and R&D expenses account for 4.7% of revenue (¥48,025 million), forming a structure that maintains technological superiority.
Company Strengths
The company holds 8 core technologies including adhesion, optical design, and nucleic acid synthesis, and has been selected for Clarivate's "Top 100 Global Innovators 2026" for the 13th time. The niche-top revenue ratio reached 49.7% (FY2025 results), building a technology and IP foundation that competitors find difficult to replicate in the short term.
Under the previous mid-term management plan "Nitto for Everyone 2025," the company achieved operating profit of ¥183,615 million against a target of ¥170,000 million, and an operating profit margin of 17.9% against a target of 17%. The financial base is also solid, with an equity attributable to owners of parent ratio of 79.6% and cash and cash equivalents of ¥359,805 million, while share buybacks totaling ¥142.0 billion were carried out over the three years.
The three segments of Optronics (revenue of ¥527,812 million), Industrial Tape (¥366,607 million), and Human Life (¥143,702 million) coexist, diversifying dependence on any single market. In nucleic acid contract manufacturing, a large-scale project has moved into the commercialization stage, and the operating loss in Human Life narrowed significantly from ¥11,718 million in the previous period to ¥5,041 million.
ENVALITH's Perspective
Performance Trend
Revenue increased 20.5% over five fiscal periods, from ¥853,448 million in FY2022 (ended March 2022) to ¥1,028,171 million in FY2026 (ending March 2026), maintaining a growth trend even after surpassing ¥1 trillion for the first time in FY2025 (ended March 2025). Meanwhile, operating profit declined slightly from the record high of ¥185,667 million in FY2025 (ended March 2025) to ¥183,615 million in FY2026 (ending March 2026), down 1.1% year on year. As an external factor, the yen appreciated 1.7% against the US dollar compared to the previous fiscal year, reducing profit by ¥8,100 million, and in Optronics, the strategic withdrawal from Optical Film (Information Functional Materials) for LCD smartphones and price reductions in Process Protective Film also weighed on results. Industrial Tape performed well, with operating profit of ¥51,662 million (up 12.6% year on year), and losses in Human Life narrowed significantly. For FY2027 (ending March 2027), operating profit is forecast at ¥193,000 million (up 5.1% year on year), based on an exchange rate assumption of ¥153 to the US dollar.
Growth Strategy
Building a resilient business portfolio through the creation and expansion of double-certified products and structural reform of low-profitability businesses
Amid expected demand growth for Electric Debonding Tape for Battery Fixing driven by the EU's Right to Repair mandate, the company decided on an investment of ¥39.0 billion at the Toyohashi Plant, the largest in its history. The company aims to respond to growing demand by enhancing production capacity and to improve profitability across the Industrial Tape business as a whole.
As large-scale disease-related projects move into the commercialization stage, commercial production began from the second quarter of FY2026 (ending March 2026). New plants in Japan and the United States are scheduled to reach full-scale operation in anticipation of increasing demand for NittoPhase™. This is a key initiative toward turning the Human Life segment profitable.
The company carefully selects and actively allocates resources to products that meet both the PlanetFlags™/HumanFlags™ certification criteria, which reflect particularly high contributions to the environment and humanity, and the Niche Top criteria. This approach aims to achieve both the resolution of social issues and the creation of economic value, building medium- to long-term competitive advantage.
The company is proceeding with a strategic withdrawal from Optical Film (Information Functional Materials) for LCD smartphones, while implementing structural reforms of low-profitability businesses such as Personal Care Materials. These efforts aim to strengthen the business portfolio and improve overall company profitability.
Targeting a DOE of 4% or more and a total payout ratio of 60% or more, the company has set the annual dividend for FY2027 (ending March 2027) at ¥64 per share (an increase of ¥4 from the previous period). In addition, a share buyback of up to 20 million shares and ¥50.0 billion is planned to be conducted from April 8, 2026 through August 31, 2026.
Last updated: July 19, 2026